Google search revenue rises 11%, solid increase in total ad revenue

Alphabet Inc., the parent company of Google, announced an increase in advertising revenue for the third quarter of 2023 compared to the same period last year.

Search revenue rose by 11.3%, alongside a 12.5% growth in YouTube ad revenue.

Google’s advertising network experienced a 2.6% decline, which marked an improvement from the 5% decrease recorded in the second quarter of 2023.

• “Our business demonstrated fundamental strength again in Q3, generating $77 billion in revenue, which is up 11% year over year. This growth was driven by significant increases in Search and YouTube, as well as positive momentum in Cloud. We remain focused on prudent capital allocation to ensure sustainable financial value,” stated Alphabet CFO Ruth Porat.

Google’s ad revenue grew by $5.17 billion compared to the prior year, with YouTube ad revenue reaching $7.95 billion, up from $7 billion in 2022.

While these results exceeded analysts’ expectations, the moderate single-digit growth in total ad revenue indicates that digital ad spending has not yet fully bounced back. Experts anticipate a return to double-digit growth by the end of 2023.

Why this matters. The better-than-expected performance may signal a stabilizing trend in trust and confidence within digital advertising following the economic downturn. This development is promising news for digital marketers, suggesting potential increases in ad spending as the important holiday season approaches in the upcoming quarter.

Google’s perspective. CEO Sundar Pichai commented:

• “I’m pleased with our financial results and product momentum this quarter, highlighted by AI-driven innovations across Search, YouTube, Cloud, our Pixel devices, and more. We continue to prioritize making AI more helpful to everyone; exciting progress is underway with much more to come.”

Earnings details. For further information, you can view Alphabet’s full third quarter 2023 earnings report.